Oscar Herencia: "The evolution of insurance must go to a concept of personalization"

The future lies in “tailored insurance” in which the customer selects an umbrella product, which can be life insurance, and then has an extensive range of goals to create a personalized product, says MetLife’s general director for Iberia.

Do you notice changes in consumer behavior during the current pandemic period for life insurance proposals that include risk and savings?
The economic crisis that followed the health crisis created some risk aversion in the Portuguese who, in many cases, are putting their savings in low-risk products, such as deposits or insurance. We must always remember that the main purpose of life insurance is to provide financial protection in the event of unforeseen circumstances - and a pandemic fits this definition perfectly. But each customer has their specific needs. We will increasingly focus on “tailor-made insurance”, in which the customer selects an umbrella product - a life insurance for example - but then has an extensive range of coverages or objectives to be able to choose and create a fully customized product. The evolution of insurance has to move more and more towards a concept of personalization.


During 2020 and in a pandemic context, how did life insurance underwriting at MetLife evolve?
We had a good start to maintain the sales pace that was already coming in 2019. Then the pandemic came and we had to stay focused on giving a quick response to reassure our customers, ensuring that there are no pandemic exclusions that apply to any one. of our individual protection policies. During this period, demand retracted, but we made a significant effort to accelerate the digital tools that helped relaunch the activity. This has allowed us to continue to support our channel of exclusive agents, the independent intermediaries who trust us and our direct marketing and bancassurance partners. I think that the impacts of the pandemic have made many Portuguese aware of the importance of life insurance in the financial protection of families. At this stage, our Iberian operation remains in the Top 3 of turnover in the EMEA region, and we remain one step ahead in the digital domain, which was very important during the confinement.


What solutions do policyholders prefer when they anticipate saving a value as a complement to the reform?
The advantage of life insurance and savings solutions is that they are adapted to different family realities. Each customer needs a different type of product to cover their risks. A consultative sale like the one we privilege through our branch network and for which we work with our intermediaries, facilitates the analysis of needs and the creation of a “tailored suit” for each client. The risk component is always fundamental, but it becomes critical in situations of uncertainty. The pandemic provided a clear example of this. My experience tells me that the Portuguese highly value life coverage and accident coverage. MetLife bet on a mixed product that allows you to capitalize part of the premium and contribute to create a guarantee in the event of any unforeseen event or to enjoy the renovation in peace, but a market as mature and as professional as the Portuguese market offers a very interesting amount of alternatives.


Can life insurance be associated with other needs, such as mortgage credit or personal accidents?
In our case, the product that meets these needs is the MetLife Complete Life Insurance. It is a product that offers great contracting flexibility, which can be associated with a mortgage loan - with a very competitive price - or include complementary coverage for personal accidents, hospitalization, serious illnesses, etc. It is a product that provides death coverage up to 85 years old and can be contracted by phone, without requiring medical exams for subscriptions of up to 350 thousand euros and up to 50 years of age.


Are the actions taken by the Authorities and Regulators in terms of promoting savings in Portugal sufficient for consumers to understand that they have to save? Have you had positive results?
We can still do more to foster private savings. I think it is already an accepted idea that public health and pension systems will be under enormous pressure in the coming decades. The population pyramid is radically reversed and we know that there are already reasonable doubts about the ability of public systems to be able to pay pensions to young people entering the labor market today. The insurance sector has an obligation to create more alternatives. And governments themselves can also help with tax incentives to increase savings.


Can life insurance be presented as an "experience" or a "sustainable" way to mitigate future financial turmoil?
No doubt. Life insurance is an efficient way to provide financial protection and peace of mind for many families. In addition, they contribute to long-term economic growth and relieve pressure on social spending. In fact, from the consumer's point of view, life insurance should almost be understood as any compulsory insurance. It is that, in addition to being a saving and prevention instrument, it also serves to cover needs as different as retirement, family protection against payment failures, the payment of studies or even the amortization of mortgages as protection of family assets. And even from the point of view of society, money invested in life insurance is fundamental for the sustainability of economies and financial markets, as they help to channel family savings towards productive investments and, increasingly, with concerns at the level ESG factors.


In terms of long-term savings, what is being considered in the face of an insured market that has a longevity perspective close to 100 years? What solutions will be proposed?
The solutions will accompany the evolution of society. I believe that the important point is that for customers, it is not indifferent to the entity where they decide to entrust their protection and put their savings. And in that respect, insurance companies are very well positioned. A multinational such as MetLife, over 150 years old - 35 of which in Portugal - offers credibility and solidity that is very well received by customers.

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